Attorneys for Sumner County are fortifying their legal push to make sure the county gets paid for the property it transferred to Sumner Regional Medical Center in 2004. In an adversary pleading filed late yesterday, available here, the county argues its reversionary interest in the property is greater than the interest of Sumner Regional Health Systems' bondholders and other creditors. Therefore, if LifePoint Hospitals ultimately close on its deal to acquire bankrupt SRHS, the county thinks it should get first dibs on the proceeds of Sumner Regional's assets. Further, the document argues “even though the court has ruled otherwise, the county alleges that the sale, as proposed, is not permissible under the Bankruptcy Code.” It asks the court to enjoin the sale’s close until the county’s interests in assets of SRHS have been “fully litigated and finally adjudicated.” The court approved the sale of the bankrupt health system to LifePoint in a sale order last week. The deal was set to close today, but yesterday Tennessee Attorney General Robert E. Cooper Jr. said he would take another month to give an opinion on whether the sale may proceed. Separate hearings on the distribution of the $154 million in sales proceeds should be scheduled in coming days. Sumner County attorney Rhea Bucy told NashvillePost.com the sale order can be appealed and, “in a separate pleading at a later time we may ask the court to reconsider that.”
Jun 30, 2010 2:41 PM
The Tennessee Attorney General's office has extended the review period for LifePoint Hospitals' planned acquisition of Sumner Regional Health Systems for another month, delaying the deal's close. The AG had planned to issue its opinion on the transaction today, the end of a 45-day review period, allowing the court-approved acquisition to close tomorrow. But in a letter today Robert E. Cooper Jr. said the office had elected to extend the review period for 30 days, concluding on Friday, July 30. A hearing set for Thursday should determine how the proceeds of the $154 million deal will be allocated. Sumner County has argued throughout the bankruptcy proceedings that it has a claim to some of Sumner Regional's real estate. LifePoint provided the following statement to NashvillePost.com:
The Office of the Attorney General has elected to extend until July 30 its review of the proposed sale of Sumner Regional Health System, Inc. to LifePoint Hospitals. Our agreement to acquire SRHS remains in place through July 31, 2010. LifePoint remains committed to closing the transaction and becoming an active member of the community. We continue to believe that approval of our proposal would ensure the future stability of SRHS and that it is in the best interests of all those who rely on SRHS hospitals , including patients, employees, physicians and the residents of northern middle Tennessee. Our hope is that the issues at hand can be resolved promptly so that we can move forward to meet the healthcare needs of the communities served by SRHS.
Jun 29, 2010 2:10 PM
Trustee for organizing attorney's personal bankruptcy case wants to look more closely into $3M debt
Jun 25, 2010 1:53 PM
U.S. Bankruptcy Court Judge Marian F. Harrison on Thursday signed the order approving the sale of Sumner Regional Health Systems to LifePoint Hospitals. Harrison had given the deal the verbal go-ahead on Wednesday, but today's action makes it official. From here the court will consider how to divvy up the $154 million in sale proceeds. The background is available here, here and here.
Jun 24, 2010 3:10 PM
More than a week after the original sale hearing, U.S. Bankruptcy Judge Marian Harrison today determined the sale of Sumner Regional Health Systems to LifePoint Hospitals Inc. may actually proceed. In an oral opinion issued this morning, Harrison refuted the objections of Sumner County officials, saying the sale will maximize the value delivered to the bankrupt health system’s estates and creditors, that LifePoint and Sumner Regional negotiated in good faith and that LifePoint has the financial wherewithal to close the deal and operate the hospitals. Attorneys in the case then worked through Sumner County’s remaining objections to the sale order, paragraph by paragraph. Among the changes that will be reflected in the final sale order is the addition of language clarifying that the sale is subject to the final approval of the Tennessee Attorney General’s Office. The reworked order should be entered and signed this week. Next week, the court will take up the issue of how the sale proceeds — approximately $154 million — will be distributed. Sumner County has been arguing that it has a financial interest in property it transferred to the health system in 2004. For all the background see links here and here.
Jun 23, 2010 2:27 PM
After a nearly four-hour long hearing this morning, LifePoint Hospitals’ acquisition of Sumner Regional Health Systems is still not a done deal. Attorneys for the bankrupt health system and Sumner County today submitted evidence related to the proposed sale, evidence that U.S. Bankruptcy Court Judge Marian Harrison said should have been collected at the initial sale hearing last week. “I think we all did a rush job the other day,” Harrison said of the June 15 hearing. Harrison had filed a memorandum opinion on June 18 that said the proposed sale of Sumner Regional to LifePoint should be approved. Attorneys for the health system subsequently entered a proposed sale order, but Sumner County — which has been fighting to assert its financial interest in property it transferred to the health system in 2004 — objected to the order because of “dozens of factual findings that simply have not been made by the Court, or even proposed or introduced into evidence by the Debtors or any other party.” With today’s evidence on the books, the court will reconvene at 9 a.m. on Wednesday to deal with the sale order. If the court approves the deal, it will then consider the disbursement of sale proceeds, including Sumner County’s claim that it has an interest in the health system’s real estate for which it should be compensated. "We’ve never had an opportunity to demonstrate to [the court] what that interest is,” said Rhea Bucy, attorney for the county. Sumner Regional originally filed for bankruptcy on April 30, naming LifePoint as its proposed acquirer based on a bid of $145 million plus a provision for working capital. More background is available at this link.
Jun 21, 2010 1:22 PM
The Office of Ohio Gov. Ted Strickland has filed an amicus brief supporting the proposed acquisition by Ardent Health Services of the Forum Health system in the Youngstown area. It's not exactly a ringing endorsement of Ardent's way of life, but it counts all the same.
While a reorganization may not be likely for Forum, the "underlying policy goals of reorganization -- job retention and maximization of debtors' assets -- are best advanced here" by the sale of Forum's assets to buyers that intend to maintain its operations.
Jun 21, 2010 7:47 AM
Based on language in her memorandum opinion Friday, U.S. Bankruptcy Court Judge Marian Harrison seemed set to approve Sumner Regional Health System's sale to LifePoint Hospitals. She wrote that the sale "in the best interests of the estates, creditors of the estates and other parties-in-interest" and Sumner Regional’s sale motion should be approved. But after Sumner Regional's legal team submitted a proposed sale order, Sumner County filed an objection — saying the proposed order "contains dozens of factual findings that simply have not been made by the Court, or even proposed or introduced into evidence by the Debtors or any other party." Judge Harrison has ordered a hearing on the matter set for 8 a.m. this morning.
Jun 21, 2010 7:10 AM